Qualcomm reportedly considering acquiring parts of Intel Chip Design business
Qualcomm has explored the possibility of acquiring part of Intel’s design division to bolster the company’s product portfolio, according to two sources familiar with the matter.
The mobile chip maker has been exploring the possibility of acquiring several parts of Intel, as Intel struggles to generate cash and is looking to divest parts of its businesses and sell other assets, the sources said.
Intel’s client PC design business is of high interest to Qualcomm executives, one of the sources said, but they are looking at all of the company’s design departments.
According to another source with knowledge of Qualcomm’s operations, it would make less sense for Qualcomm to acquire other parts of Intel, such as the server segment.
Qualcomm has not approached Intel about a possible acquisition and declined to comment on the plans, an Intel spokesman said. Intel is “deeply committed to our PC business,” the spokesman said.
Qualcomm declined to comment.
The $184 billion (approximately Rs. 15,44,218 crore) Qualcomm, which is known for chips in smartphones and counts Apple as a customer, has been working on plans to buy chunks of Intel for months. Qualcomm’s interest and plans are not yet finalised and could change, the sources said.
The two sources declined to be named because they were not authorized to discuss the matter publicly.
Intel reported a disastrous second quarter last month, including a 15 percent workforce cut and a pause on dividends, as executives grapple with how to continue funding the company’s production plans and generating cash.
Revenue from the PC consumer business fell eight percent last year to $29.3 billion (about Rs 2,45,900 crore), due to overall weakness in the PC market.
Intel’s customer base, once known for its “Intel Inside” marketing campaign, makes laptop and desktop chips that go into machines around the world. Executives have said the introduction of artificial intelligence (AI) PCs will encourage consumers to upgrade their computers and generate more sales.
Qualcomm generated total revenues of $35.82 billion (approximately Rs 300,451 crore) in the last fiscal year.
Earlier this week, Intel launched a new PC chip called Lunar Lake that executives said offers superior performance for AI applications. Taiwan Semiconductor Manufacturing Co. manufactured significant portions of the chips, something Intel has historically done in-house.
Intel’s board of directors is meeting next week to consider a proposal from Intel CEO Pat Gelsinger and other executives on how to trim the business in an effort to save money. Possible options include a sale of its programmable chip unit Altera, Reuters reported.
© Thomson Reuters 2024
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